GE has won another huge deal for its 12-megawatt Haliade-X offshore turbine, this time for the 3.6-gigawatt Dogger Bank trio of projects in the U.K.
The project's co-developers, Equinor and SSE Renewables, named the technology their preferred choice, with the final investment decision due next year.
Dogger Bank is set to become the world's largest offshore wind farm as it comes online from 2023-2025 within the U.K.'s portion of the North Sea, starting about 130 kilometers (81 miles) from the Yorkshire coast.
The project's three 1.2-gigawatt phases, known as Creyke Beck A, Creyke Beck B and Teesside, respectively, were awarded contracts for difference in the U.K. government's latest auction at an average strike price of £40.96 ($50.35), a sharp decline from previous rounds and not far from the wholesale power price.
The offshore wind market has been dominated to date by two turbine suppliers, Siemens Gamesa and MHI Vestas. Now it would appear that GE’s long game with the Haliade-X is bearing fruit.
GE secured its first order for its Haliade-X turbines two weeks ago when Ørsted ordered 1,200 megawatts for two projects along the U.S. East Coast.
The recent deals represent a "promising restart" for GE's offshore ambitions and "can be used to showcase GE’s prowess to other leading asset owners," said Shashi Barla, WoodMac's principal analyst for the offshore wind supply chain.
"The global offshore market (excluding China) is a virtual duopoly, with Siemens Gamesa and MHI Vestas securing most of the offshore orders," Barla noted. "Developers will be keen to harness a third turbine supplier to mitigate the potential supply chain risks and enable a better negotiating edge with suppliers."
John Lavelle, GE's offshore wind CEO, said the company accepts that offshore wind is a long-cycle game and was prepared to put the time in with its 12-megawatt turbine, going through the same process of design, engineering and testing that its other businesses undertake.
“It was part of our strategy to do something that made a real difference, that was a differentiator in the marketplace, and yet do something we were fully confident in accomplishing,” Lavelle told GTM.
GE reentered the offshore wind business through its acquisition of Alstom's power and grids businesses. Haliade-X is manufactured in France, and represents a doubling in nameplate capacity from the company's current 6-megawatt offshore platform.
The three customers signed up for Haliade-X so far have spent the best part of a year doing their own due diligence on the designs. Meanwhile, the first nacelle is on its way to field testing in Rotterdam, and the second will be tested at the U.K.'s ORE Catapult research facility. Blade testing will take place at ORE and in Boston.
Lavelle said that means “full system testing [will occur] years before the products ship and go into commercial operation."
Offshore wind is a critical growth area for GE's standalone Renewable Energy division, and there are plenty more project tenders and deals on the horizon in Europe, the U.S. and Asia.
Asked whether GE has potential buyers from all three markets doing the same due diligence as Ørsted, Equinor and SSE, Lavelle answered with a simple “yes."
WoodMac's Barla said the confidence shown by the three customers for Haliade-X can be a springboard to new business for GE, including in Asia.
“The pursuit for lower [levelized cost of energy] is enabling adoption of the next-generation turbine technologies earlier than anticipated," Barla said.
"This will be help the industry as a whole to reduce the cost of offshore wind and make it competitive against other forms of power generation."
Wood Mackenzie is hosting an invite-only analyst briefing on the U.S. offshore wind sector in Boston the morning of Wednesday, October 23. Email [email protected] to express interest in attending.